Turnover in Fedwire Funds Has Dropped Considerably since the Crisis, but It's Okay

Rodney Garratt, Antoine Martin and James McAndrews

No 20140825, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: The Fedwire Funds Service is a large-value payment system, operated by the Federal Reserve Bank of New York, that facilitates more than $3 trillion a day in payments. Turnover in Fedwire Funds, the value of payments made for every dollar of liquidity provided, has dropped nearly 75 percent since the crisis. Should we be concerned? In this post, we explain why turnover has dropped so much and argue that it is, in fact, a good thing.

Keywords: Fedwire Funds; Crisis; Liquidity Provision (search for similar items in EconPapers)
JEL-codes: G2 (search for similar items in EconPapers)
Date: 2014-08-25
New Economics Papers: this item is included in nep-mon
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